(Reuters) – Steel Authority of India (SAIL) reported a decline in second-quarter profit on Thursday, as a sharp fall in steel prices and tepid demand weighed.
The state-owned firm’s consolidated net profit fell 31% to 8.97 billion rupees ($106 million) in the three months ended Sept. 30.
Revenues dipped 17% to 246.75 billion rupees.
Its expenses fell 14% to 238.24 billion rupees, owing to a nearly 10% decline in input costs as prices of iron ore and coking coal – key steelmaking raw materials – fell.
KEY CONTEXT
Steelmakers in India have been struggling with rising cheap imports from China, South Korea and Vietnam, which has led to steel prices tanking to over a three-year low in the quarter.
However, a fall in costs of iron ore and coking coal helped limit the hit to earnings.
Bigger rival JSW Steel reported a bigger-than-expected quarterly profit, while Tata Steel topped quarterly profit on higher volumes in Netherlands.
PEER COMPARISON
Valuation (next 12 Estimates (next 12 Analysts’ sentiment
months) months)
RIC PE EV/EBITDA Revenue Profit Mean No. of Stock to Div yield
growth growth rating* analyst price (%)
s target**
Steel Authority of 13.06 6.84 3.60 18.00 Sell 11 1.02 1.69
India
JSW Steel 19.31 9.49 10.06 46.97 Hold 30 1.01 0.73
Tata Steel 13.39 7.16 6.41 96.38 Hold 30 0.91 2.36
Jindal Steel And 12.63 7.27 18.66 31.31 Buy 26 0.88 0.21
Power
** Mean of analysts’ ratings standardised to a scale of strong buy, buy, hold, sell, and strong sell
** Ratio of the stock’s last close to analysts’ mean price target; a ratio above 1 means the stock is trading above the PT
JULY-SEPTEMBER STOCK PERFORMANCE
— All data from LSEG
— $1 = 84.2730 Indian rupees
(Reporting by Manvi Pant in Bengaluru; Editing by Mrigank Dhaniwala)
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